THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, CNN ANCHOR: Happening now, President Bush warning Iran could trigger World War III. He's talking bluntly and at length about Tehran's nuclear threat. But there's another nuclear question he's dodging. Plus, the new showdown over domestic spying. House Democrats are ignoring a presidential veto threat. Coming up, the vote on government surveillance.

And he's an actor, an activist and a leading supporter of Tibet's exiled spiritual leader. Richard Gere is standing by to join us live right here. We'll talk about the Dalai Lama's prestigious award on Capitol Hill today and the angry protests coming in from China.

I'm Wolf Blitzer, you're in THE SITUATION ROOM.

President Bush says he has felt never more engaged in his job and he's trying to move it today by answering a wide range of questions about trouble spots around the world and hot button issues right here at home. In his news conference this morning, the president said he's against Turkey's possible military offensive against Kurdish rebels in northern Iraq. He accused the Democratic-controlled Congress of dragging its feet on bills he considers to be extremely important. Among other things, Mr. Bush urged quick action on the mortgage relief, saying the housing market is a weak spot on the largely strong economy.

As eager as Mr. Bush seemed to answer some questions, including those about Iran, he clammed up once again on another very sensitive issue. Let's bring in our White House correspondent Ed Henry. He's watching the story for us.

Tell us what happened involves that issue, Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf. More tough talk on Iran, but the president's silence on Syria is just deafening.

(BEGIN VIDEOTAPE)

HENRY (voice-over): In the starkest terms yet, President Bush warned of dire consequences if the nuclear ambitions of Iranian President Mahmoud Ahmadinejad are not squelched.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If you're interested in avoiding World War III, it seems like you ought to be interested in preventing them from having knowledge necessary to make a nuclear weapon. I take the threat of Iran with a nuclear weapon very seriously.

HENRY: That came as Russian President Vladimir Putin, after meeting with Iran's president, admonished the U.S. not to take military action against Tehran, and contradicted Mr. Bush, insisting Iran does not want to build nuclear weapons.

BUSH: If those are, in fact, his comments, I look forward to having him clarify those.

HENRY: When asked about Putin's plan to keep power by becoming prime minister, the president took a shot at his ally.

BUSH: When I saw him in Australia, I tried to, you know, get it out of him who is going to be his successor, what he intends to do. And he was wily. He wouldn't tip his hand.

HENRY: Mr. Bush was far less candid about Syria's nuclear ambitions for the second straight press conference, shutting down all questions about Israel's strike against an alleged nuclear site in Syria.

QUESTION: Can I ask you whether...

BUSH: You can ask me another question.

HENRY: The point is whether Israel has now set a precedent to eventually launch an attack against Iranian nuclear sites; echoes of 1981, when Israel used self-defense to justify a strike on an Iraqi nuclear reactor.

BUSH: I don't remember what I was doing in the 1980s. See, I was living in Midland, Texas. I don't remember my reaction that far back.

(END VIDEOTAPE)

HENRY: There's obviously some very high-level intelligence on Syria that the president can't discuss, but his silence on this matter is certainly raising eyebrows about whether there's another powder keg in the Mideast that could explode -- Wolf.

BLITZER: All right. Ed, thank you. Right now the House is getting ready to vote on a wiretap bill supporters say would better protect Americans' privacy. Opponents say it would hamper the war on terror. The president says he is going to veto it. Our congressional correspondent Jessica Yellin is up on Capitol Hill.

Where does all this stand, Jessica, right now?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well, Wolf, it looks like this vote is likely to break down along strict party lines, Republicans voting against, Democrats largely voting for. We're hearing in the House of Representatives a lot of rhetoric, but not a lot of room for compromise. (BEGIN VIDEOTAPE)

YELLIN (voice-over): The Bush administration says the House Democrats' wiretap bill is purely political and the president wouldn't sign it into law.

BUSH: The House is now considering another FISA bill that would weaken the reforms they approved just two months ago.

YELLIN: Slamming the bill, House Republicans insist this measure would make America less safe.

REP. LOUIE GOHMERT (R), TEXAS: This doesn't extend the Constitution in a way that it should be on American soil. It protects enemies.

REP. RANDY FORBES (R), VIRGINIA: It's about the national security of this country. It's about your children and your grandchildren and each of us when we go to shopping malls, when we go to work in the morning and whether or not we're going to be safe.

YELLIN: House Democrats say Republicans are resorting to scare tactics. They insist the bill gives intelligence agents all the tools they need and claim it would better protect Americans' privacy by allowing a court to help set the surveillance rules.

REP. NANCY PELOSI (D-CA), SPEAKER: As we protect and defend the American people, our oath of office calls upon us to protect and defend the Constitution and our civil liberties.

(END VIDEOTAPE)

YELLIN: Now, Wolf, the Senate is expected to take up this issue next. And folks at the White House believe the Senate version will be more bipartisan and more to the White House's liking. And in fact, the White House has just made a key concession to help along the Senate bill. They've allowed certain senators and their staffs to go to the White House and look at legal documentation, that is, the legal justification for the president's original wiretap. And this is something that senators have wanted, and it's a big give by the White House.

BLITZER: What's the main difference, Jessica, between the House version and proposed Senate version?

YELLIN: Well, it has to do with telecommunications companies. The president and the White House really want those telecommunications companies to get immunity for agreeing and helping the White House on past wiretaps so they can't get sued. It looks like the Senate version is likely to do that. The White House at least believes they will, and the House version does not.

BLITZER: And I know there's a lot of skepticism about that so- called retroactive immunity for those big phone companies. We heard it hear yesterday in THE SITUATION ROOM when Senator Specter and Senator Leahy were with us then. All right. Jessica, stay on top of this story for us.

Let's check in with Jack Cafferty. He is in New York. He has got "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Strange bedfellows, perhaps, Wolf. NASA or the battle against illegal immigration. The Senate has voted down a proposal that would have shifted $150 million from NASA's budget to a program that reimburses states for jailing illegal aliens who have at least one felony or two misdemeanor convictions. The Houston Chronicle reports that NASA's defenders say that the agency is already suffering from inadequate budgets and its missions would be compromised if the money were cut. They describe the cuts as potentially devastating and a major setback for NASA.

Republican Senator John Ensign described his amendment to shift this $150 million as essential. It would go toward the State Criminal Alien Assistance Program, which helps to reimburse states for keeping illegal aliens in jail. And he said it's especially important for southwestern states and their local law enforcement in the fight against criminals who are in this country illegally.

This all comes less than two weeks after the Senate voted to add a billion dollars to NASA's budget, which would bring its budget up to $18.5 billion for the year. The State Criminal Alien Assistance Program, well, it is budgeted at just $400 million. So the question is this, should $150 million of NASA's budget be used instead for jailing illegal aliens? E-mail us caffertyfile@cnn.com, or go to cnn.com/caffertyfile -- Wolf.

BLITZER: Thanks, Jack. Jack will be back shortly.

The Democratic front-runners are both trying to win the African- American vote. Now there's some new evidence about which way black voters are leaning. The results of our brand new CNN poll on the Clinton-Obama contest.

Also coming up, he says Senator Larry Craig's explanation of his bathroom bust doesn't pass the smell test. Fellow Republican John Ensign wants Craig out. I'll talk with Senator Ensign. He's the man in charge of trying to get Republicans elected to the Senate. He's standing by live.

And the actor Richard Gere has used his fame to focus attention on Tibet and its exiled spiritual leader. I'll ask Gere if today he's satisfied with the way the U.S. is recognizing the Dalai Lama. He's going to be here live as well. All of that, a lot more, coming up right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Some big headaches right now for Senate Republicans. Senator Larry Craig is refusing to call it quits after saying he intended to resign over that bathroom bust. At the same time other GOP senators who had a virtual lock on their seats have announced they're retiring. Joining us now, the man in charge of trying to get Republicans elected to the Senate. It is a tough job, the chairman of the National Republican Senatorial Committee, John Ensign of Nevada.

Senator, thanks very much for coming in.

SEN. JOHN ENSIGN (R-NV), CHAIRMAN, NRSC: It is good to be with you, Wolf.

BLITZER: Let's talk about Larry Craig, first. You were among the first of his Republican colleagues who suggested it would be best for him to leave the Senate after that bathroom bust that he pleaded guilty to, that disorderly conduct charge. Here's what he said last night to Matt Lauer, listen to this.

(BEGIN VIDEO CLIP)

SEN. LARRY CRAIG (R), IDAHO: I've got nearly 30 years of seniority that's Idaho's. Idaho gained that seniority and power because I was there, and I had that longevity. This isn't my seat. It belongs to Idaho.

(END VIDEO CLIP)

BLITZER: All right. What do you say to the senator?

ENSIGN: Well, first of all, the senator said that by the end of September, if the guilty plea was not overturned, if he was not re- established on his seniority on committees, that he would resign. Neither one of those things happened. Neither one of those things are going to happen. I call on Senator Larry Craig, if he loved the Senate, if he loved our party, that he would keep his word.

BLITZER: Tell us why. Tell us why.

ENSIGN: Well, first of all, what is different Larry Craig versus some of the other things that we've heard lately is that he pled guilty. He pled guilty to something, obviously it was embarrassing to himself, to his family, to the entire United States Senate. And I think that he did the right thing by saying he would resign. Now he should keep his word.

BLITZER: But it was a misdemeanor. People that have parking tickets and speeding tickets are misdemeanors as well. He argues, you know what, it's unfair to the people of Idaho for him to take what he calls the easy path and just simply resign.

ENSIGN: Well, Wolf, there are misdemeanors and then there are misdemeanors. And this thing wouldn't be making the national news if it was just an ordinary misdemeanor.

BLITZER: You don't believe -- is that what you're suggesting? You don't believe his explanation, that he just didn't want the publicity, he thought he would plead guilty, no one would ever know and just move on?

ENSIGN: You know, I think that the American people kind of stand with me on this that it's pretty obvious why he probably pled the way that he did. But the bottom line is, he did plead guilty. He pled guilty to something that -- you know, lewd behavior basically in a public restroom. And that's not the kind of behavior the United States senator should be engaged in.

As far as the whole thing, he is not running for re-election anyway, so Idaho is losing that seniority, he ought to resign so that whoever steps in there can start building up their seniority.

ENSIGN: I'm saying that, you know, if you listen to the tapes and you listen to all the circumstances involved, that Senator Craig, I think, had good reason to say he would resign if the guilty plea wasn't overturned. That's the bottom line, is he pled guilty. That's why his case is so much different than any other cases we've heard.

BLITZER: But why is it so much different than David Vitter? The Democrats keep pointing to the Republican senator from Louisiana who said he committed a sin involving that alleged D.C. call girl, that madam, the D.C. madam operation?

ENSIGN: First of all, he never said exactly what he did. Secondly, it happened before he got into the United States Senate and there were no laws that were broken as far as anybody knows.

BLITZER: Shouldn't the process go forward? There's a Senate Ethics Committee that is going to look into this as far as Senator Craig is concerned. Why not just let that process go forward and see what they come up with?

ENSIGN: Well, that is the process that is going to go forward now. But I think sometimes it's about more than yourself. You have to put your own ego aside and you have to do what's right for the institution. You have to do what's right for your party. And in this case, he's doing neither.

BLITZER: You're afraid that if he stays in this, it is going to hurt Republicans across the board as far as getting themselves either re-elected or elected to the Senate?

ENSIGN: The longer he stays there, we certainly don't need this kind of publicity. But also the U.S. Senate itself doesn't. There's too many people out there that paint with a broad brush that we're all corrupt, that we're all immoral, and having these kind of things happen, whether it's a Republican senator, a Democratic senator, we certainly had plenty of Democrat scandals in the past, we need people who are in office who will hold themselves to a little higher standard.

BLITZER: Right now the Democrats have a 51-49 majority, if you take a look at those two independents who vote with the Democrats, but there are five open seats that Republicans currently hold, if you include Senator Craig.

Four of them could be in play, I'm not including Idaho, and then there are a bunch of vulnerable Republican incumbents, including senators Collins, Coleman, Smith, Sununu, they're getting -- if they pick up all of those, the Democrats, they're getting very, very close to that magic number of 60, which would be able to overturn or do away with a filibuster that would dramatically reduce Republicans' influence in the Senate.

How worried are you, as the man in charge of trying to get Republicans back to the majority?

ENSIGN: Well, there wasn't a long line of people who wanted to take my job, let's put it that way.

BLITZER: It's a tough job you have.

ENSIGN: Tough job, tough cycle. All of those things are absolutely obvious, but when you get down below the surface, when you just look at the number of retirees from Republicans, the number of Republican seats up, it looks very, very bad.

I ran against Harry Reid in 1998. We were counting on getting to 60 back in 1998. We actually ended up losing net votes because we of some that we lost, some of the close elections. Thirteen months is an eternity in politics. So many things can happen, can change, depending on who the candidates are, how well they run, how much money they raise, all of those types of things.

If you look at race by race by race, we -- I can actually paint a pretty good scenario where we could hold even or even an outside chance of us picking the majority back up. So a lot of these things are completely dependent on so many factors right now. And it is way too early to make any kind of predictions.

BLITZER: Well, we'll talk about that down the road, because I would love to go race by race by race.

ENSIGN: I would love to do that with you, Wolf.

BLITZER: Senator Ensign, thanks for coming in.

ENSIGN: Great to be with you.

BLITZER: We're going to be in your beautiful state in Nevada, in Las Vegas, November 15th for the Democratic presidential debate that I'll be moderating. Looking forward to being at UNLV.

ENSIGN: Appreciate you coming to our state. Make sure you spend plenty of money there to keep my taxes low.

(LAUGHTER)

BLITZER: Not going to be gambling though. Thanks, Senator, very much.

Hillary Clinton is sending a message to African-American voters this week that if she wins the White House she'll follow in the footsteps of her husband, who is still incredibly popular within the black community. On the face of it, you might think black voters would lean towards Clinton's leading Democratic presidential rival, Senator Barack Obama, but guess what? It's not turning out that way, at least not yet. Our senior political analyst Bill Schneider has been studying our brand new CNN/Opinion Research Corporation poll.

Bill, what does our poll show about the black vote in the Democratic race?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, it shows that black voters respond to other things besides race.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): We're seeing a fierce competition for African-American votes in the Democratic campaign. Two Democrats have strong support in the black community, Barack Obama, the only African- American candidate; and Hillary Clinton, whose husband was once honored by the Congressional Black Caucus as the nation's "first black president."

So where does the race stand among black Democrats? In April, Clinton led Obama by 17 points among black Democrats nationwide. Now her lead has grown to 24 points. Senator Obama's explanation?

The Clintons have been on center stage in national politics for 15 years. Obama only since his 2004 Democratic Convention speech.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The African- American community across the country doesn't know me the way the African-American community in Illinois knows me.

SCHNEIDER: But something else is going on, a huge gender gap among black Democrats. Obama has a slight edge over Clinton among black men. But among black women, Clinton leads Obama by nearly three to one.

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Well, if you want something done, ask a busy woman to do it, and we often will see the results.

SCHNEIDER: The gender gap exists among white Democrats, too, but it is not nearly as big.

Hillary Clinton and Rudy Giuliani are warming up for a possible general election clash. Just ahead, Giuliani now questioning Senator Clinton's resume. Is that line of attack likely to get him anywhere. Dick Armey and Bill Press, they are standing by for our "Strategy Session."

And the slumping housing market, could it pull the economy into a recession? We're watching that as well. Stay with us, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Our Carol Costello is joining us now with a closer look at some other incoming stories making news.

What's going on, Carol?

CAROL COSTELLO, CNN ANCHOR: A couple things, Wolf. Attorney General-designate Michael Mukasey is making it clear he won't by anyone's political puppet. At his confirmation hearing today, he told senators that if confirmed, he'll be independent of the White House and politics. Mukasey promised to make decisions based on facts and the law, even to resign if he ever receives a presidential order he believes is unconstitutional.

A major shift in how the Navy operates. A strong focus on preventing wars is now as important as winning them. That's what the Navy, Marine Corps and Coast Guard officials announced today. It's the first major revision of U.S. Naval strategy in some 20 years. Officials say they'll focus more on humanitarian missions and better international cooperation.

The worse it gets, the greater the fear of an outright recession. That is what experts warn about the slumping housing market. Just today the government reports new home construction plunged last month to its lowest level in 14 years. In the meantime, the Labor Department reports that consumer prices rose in September at the fastest pace in four months.

And you do it all the time, you stand in line for your coffee or tickets to some hot event, but did you know that standing in line to get into a congressional hearing is also a hot ticket? That's what more lobbyists should be doing, but many of them hire professional line-standers to do their waiting. Well, now a Missouri Democratic senator wants lobbyists to wait just like everybody else. Claire McCaskill's legislation would require lobbyists to certify they have not paid anyone to save a seat for them at the hearings. Tell you how that legislation turns out, back to you, Wolf.

BLITZER: Thanks very much, Carol, for that.

He's an actor and an advocate for human rights in Tibet. Richard Gere is here to talk about his relationship with the Dalai Lama, as the spiritual leader receives the Congressional Gold Medal today. And Fred Thompson wants to be the next Republican presidential nominee. But he is skipping some appearances in the early primary states. So where is Thompson? And is this part of a secret strategy? Stick around, you're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Happening now, Turkish lawmakers do what the U.S. hoped they wouldn't do, approve a plan for Turkey to go into northern Iraq to chase down Kurdish rebels. That could make Iraq's violence even worse. Now President Bush has a special warning. We're following the story for you.

Also, it's a bacteria that lives on all our skins, but can become a serious problem when it can't be killed by antibiotics. Now it has forced the shut down of an entire school district in Virginia after one student dies from a strain of the staph bacteria. We're watching this story.

And you now have another person to consider for president. That would be the funny man, the comedian Stephen Colbert. Should the current candidates worry he'll get more laughs and some support?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

A confusing primary calendar is getting even more confusing right now with two more states moving up and another state standing firm. Our Tom Foreman is here in THE SITUATION ROOM covering all this action.

It is hard to understand what is going on, so update our viewers on what we know, Tom, right now.

TOM FOREMAN, CNN CORRESPONDENT: These states just keep jockeying and jockeying for position and prominence. And these latest moves are pushing the presidential primary calendar earlier and earlier.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): What a way to kick off the New Year. The first votes in the race for the White House will be cast just three days into 2008. Iowa Republicans say they are moving up their caucus to January 3rd to ensure their contest will be the first in the nation. No word yet on whether Iowa Democrats will follow suit.

Also likely to move up are South Carolina's Democrats. They want to hold their primary on January 26th, that means we could have two primary dates in South Carolina since Palmetto State Republicans have already pushed their contest up to January 19. That's the same day Nevada is supposed to hold its caucuses. There was talk Nevada could move up a week, but the state's Democrats now say they're staying put.

The big question then is, what will New Hampshire do? It's always held the nation's first primary, and wants to keep it that way. With Michigan moving its primary up to January 15, the latest the Granite State could go would be the 8th. The earliest? How about a December primary?

New Hampshire Secretary of state Bill Gardner, the man who will set the date, is keeping quiet.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: So, when is the primary going to be?

(LAUGHTER)

WILLIAM GARDNER, NEW HAMPSHIRE SECRETARY OF STATE: I don't know.

JOHNS: You don't know?

GARDNER: I don't know.

JOHNS: You haven't decided even yet in your own brain?

GARDNER: No.

MARK PRESTON, CNN POLITICAL EDITOR: What we're seeing play how is a high-stakes chess game, with all of these states fighting to have a major role in choosing the next president.

(END VIDEOTAPE)

FOREMAN: OK, you're confused by all these numbers, and I don't blame you. It's almost impossible to keep track of right now.

But here's what you want to know. Last time, 2004, John Kerry pretty much had clinched the nomination by the 16th of March. And that was really, really early. But look at what we have got this time. We will probably know who the two candidates are by the 5th of February, well before Valentine's Day. That's really unprecedented.

We will know it then, because we will have a lot of big states, California, New Jersey, New York, Illinois, and a bunch of others who will all vote on that day. Really -- we said it before -- in practical terms, we basically have a national primary now, something we have never had in this country. And it's going to be very interesting to see the reaction of the campaigns and the reaction of voters.

BLITZER: And, if the trend continues this way, we can only imagine when we will know who the nominees are in 2012.

FOREMAN: Yes. And then -- and then -- yes, exactly. And then what's going to happen after that is that we're going to go into this long, slow grind of, OK, who's the running made going to be, which nobody is that interested in.

(LAUGHTER)

FOREMAN: But that's what we're going to have...

(CROSSTALK)

FOREMAN: ... the general election.

BLITZER: The running mates will be interested...

(CROSSTALK)

(LAUGHTER)

FOREMAN: Yes, they will be.

(LAUGHTER)

BLITZER: Tom, thanks very much.

Here's a programming note for you. On November 15, I will be in Las Vegas, Nevada, to moderate a debate in that key Western state among the Democratic national candidates -- Las Vegas, November 15.

Tom Foreman, as you know, is part of the Emmy Award-winning best political team on television. And, remember, for the political news at any time, you can check out our Political Ticker. Simply go to CNN.com/ticker.

Secret strategy or big mistake? Fred Thompson has been skipping some appearances in the early primary states. Will voters retaliate when they go to the polls?

Also coming up: Does Hillary Clinton have the experience to be president? You might be surprised to learn which of her opponents is now raising that question.

Also regarding Hillary Clinton: Can a blue-state senator win votes in red states?

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: President Bush says, don't count him out.

At a news conference at the White House today, the president insisted he's still relevant.

Here for our "Strategy Session," radio talk show host Bill Press and former Republican House Leader Dick Armey.

Guys, thanks very much for coming in.

(CROSSTALK)

BLITZER: It reminded me a little bit of when Bill Clinton, remember, said "I'm still relevant" at one moment in his presidency.

Here's what the president said today. Listen to this.

(BEGIN VIDEO CLIP) GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Quite the contrary, I have never felt more engaged and more capable of helping people, American people recognize there's a lot of unfinished business, and I'm really looking forward to the next 15 months. I'm looking forward to getting some things done for the American people.

(END VIDEO CLIP)

BLITZER: He says he's going to go the finish line, then going to head to Crawford, Texas, where he can relax. But there is a lot of unfinished business. He is still president of the United States, and he's still relevant.

BILL PRESS, RADIO TALK SHOW HOST: Yes.

You know, I would like to say that, when a president has to tell you he's still relevant, that means he no longer is. But the truth is, there's still a lot of power to even a lame-duck presidency, I believe. Dick would know better than I.

But, look, he can still twist enough arms to block a vote, as he seems to have done on the Armenian genocide. He can still exercise that veto pen, as he did on Iraq and on SCHIP. And he could still start a war. I hate to say it. He's commander in chief.

BLITZER: He is the commander in chief. And there's a lot he can do over these next 15 months or so.

DICK ARMEY, FORMER REPUBLICAN HOUSE MAJORITY LEADER: Oh, there's probably -- he needs to understand that, given the makeup of Congress, his job is to stop bad things from happening.

And he will try to -- we will work out some budget arrangements, some agreements. They need to worked out. The biggest fear we have is that he gets anxious about proving his relevance and makes a bad deal. For example, if he were to set up a commission to solve the -- the solvency problems of Social Security, we could end up with the Democrats raising taxes, cutting benefits, and blaming it on Republicans.

BLITZER: Basically, you just want to make sure he uses his power to avoid doing what you would consider to be blunders?

ARMEY: Absolutely right.

BLITZER: For the Democrats...

(CROSSTALK)

ARMEY: .. .stop the Democrats.

(CROSSTALK)

BLITZER: The Democrats have the majority in the House and the Senate. Can the Democrats, should the Democrats be reaching out more to the president, because, as you yourself point out, Bill, he does have still a lot of authority and a lot of power.

PRESS: I think absolutely. They cannot write him off.

I was hoping that the Democrats and George Bush could get together on immigration, for example. There's a pressing problem that's not going to go away.

BLITZER: He tried...

(CROSSTALK)

PRESS: He tried. He couldn't get enough members of his own party. That's one area of agreement.

And, somehow, look, they're going to have to reach an agreement, I believe, on this children's health program, because, frankly, I don't think Republicans can go into 2008 and just not do anything.

(CROSSTALK)

BLITZER: It's a tough issue for Republicans going into an election season for the president to veto an expansion of a popular children's health insurance program for poor kids.

ARMEY: Well, yes, it is. But the Democrats are cracking me up on this, because they have an alternative minimum tax to punish the rich. Now they have got an SCHIP where the poor qualify for the ATM, so they have met themselves coming and going on this.

It should be a fairly good case for the president to make on this veto. We have done it. Now let's fix this thing and make it sensible.

PRESS: You know, the children's health program was a Republican program. You were probably part of one of the ones that started it. It was a good program, and we ought to expand it.

BLITZER: Let's talk a little bit about the presidential campaign. Rudy Giuliani and Hillary Clinton, a lot of people think that is going to be the race when all the dust settles.

Here's what Giuliani said yesterday. He said: "Honestly, in most respects, I don't know Hillary's experience. She's never run a city. She's never run a state. She's never run a business. She has never met a payroll. She has never been responsible for the safety and security of millions of people, much less even hundreds of people."

Is Giuliani right about all that?

PRESS: First of all, I think it's an interesting strategy, which is ignore Romney, ignore Fred Thompson. Go after Hillary. Last time I looked at the polls, I think he was second in Iowa, and second or third in New Hampshire. I think he better spend some time focusing on winning the primary. But the interesting discussion is, OK, on experience, who is more qualified, a U.S. senator or a mayor, somebody who's been dealing with foreign policy or somebody who has been dealing with potholes? That's an interesting debate.

BLITZER: Here's the response from the Clinton campaign, Congressman: "This was an argument he made in 1999. It didn't work then and it won't work now, because the people who are the most important, the voters, think Hillary's 35 years of advocacy, strength and experience make her ready to lead and deliver change."

ARMEY: Well, that's what's cracking me up a little bit about this strategy...

(LAUGHTER)

ARMEY: ... because the people whose vote that the mayor would have to have to be elected are frightened to death about Hillary's ability to be in charge.

(LAUGHTER)

ARMEY: I mean, I'm not worried about Hillary not being able to be in charge. I will guarantee you, before her bags are unpacked, she will let everybody know: I'm running this White House and I'm running this executive branch.

PRESS: You got that right.

(LAUGHTER)

BLITZER: Dick Armey and Bill Press, thanks to both of you guys for coming in.

PRESS: All right. Thanks, Wolf.

BLITZER: Stand by.

At a time when people are wondering about Fred Thompson's sparse campaign schedule, there's a sighting of the Republican presidential candidate today. Thompson and rivals Rudy Giuliani and Mitt Romney appeared here in Washington before the Club For Growth.

Thompson tried to assure the group of anti-tax conservatives that he knows where they're coming from.

(BEGIN VIDEO CLIP)

FRED THOMPSON, REPUBLICAN PRESIDENTIAL CANDIDATE: Remembering where we came from, I remember, back in '94, when we had a chance to revisit those principles and really ask ourselves what we believed, and Clinton had defeated us not long before that. We were kind of down as a party. We were kind of down as a nation.

(END VIDEO CLIP) BLITZER: While Thompson is here in Washington, he's been conspicuously absent from New Hampshire, canceling a weekend appearance there.

Let's go to our chief national correspondent, John King. He's in Manchester, New Hampshire. He's watching all of this.

In that speech back in Washington today, Fred Thompson called himself, as he often does, a consistent conservative. He's been anything but consistent out in the early primary states. As you noted, we're here in Manchester, New Hampshire, today.

And we talked just a few moments ago with Dan Hughes. He's a prominent Republican here, a developer who helped Ronald Reagan organize this state back in 1980. He was prepared to be a key part of the Thompson campaign. They have now parted ways, though. Dan Hughes says he is looking for a new candidate, because Fred Thompson, in his view, has given up on New Hampshire.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm a son of New Hampshire. I want the campaign in my state and I wants the candidates up here. He has a great opportunity. We had some great events for him to come to. The few events that he did come to, we had -- one event, we had 500 people there waiting for him.

And, so, we can run a campaign, but we need a candidate.

(END VIDEO CLIP)

KING: So, a great sense of frustration here in New Hampshire.

We checked in, in Iowa as well, where the Thompson campaign has been a bit more active. He paid his second visit to Iowa since his announcement about six weeks ago recently. We talked to Ted Sporer. He is the chairman of the Polk County Republican Party in Iowa. He says it's idiotic, the like he hears from Washington, that Thompson is quickly fading in the race. But then he quickly added, if Thompson wants to compete seriously in Iowa, he better get out there.

(BEGIN VIDEO CLIP)

TED SPORER, POLK COUNTY, IOWA, REPUBLICAN PARTY CHAIRMAN: If I were advising the Thompson campaign, I would say, you need to be in Iowa a lot more often than you have been, because while there was time to make up for the lost time, that time is now.

(END VIDEO CLIP)

KING: And, so, that time is now, he says, to get out there and campaign in Iowa, Wolf.

So, out in the key states, you do get a sense of frustration, even from supporters of Fred Thompson. Here in New Hampshire, they think he abandoned the state. In Iowa, they think he better get out there much more often. In South Carolina, they say they're the firewall. They believe the Southerner will try to make his strongest stand in South Carolina. But they're worried even there, Wolf, that if he does poorly in Iowa and here in New Hampshire, there might be trouble in South Carolina as well.

BLITZER: John, how is the Thompson campaign handling all these questions involving his campaign schedule?

KING: Well, they say it's largely a product of the chattering class in Washington, saying he's a lazy candidate or saying he has just one event a day. Why isn't he in New Hampshire? Why isn't he in Iowa?

But they also do concede in the Thompson campaign at very high levels Wolf, a growing sense of frustration. Some aides say that frustration is with Thompson. They think he could be busier.

Others say, though, they're worried that all this chatter that he's not working very hard, his slip in the polls, nine points in our own poll in the last month, will affect his fund-raising. And of course they need that money, as you were just talking, only 80 days, less than 80 days now, until the Iowa caucuses -- Wolf.

BLITZER: Which goes by very, very quickly.

All right, John in Manchester, thanks very much -- John King reporting.

In a moment, the visit to America that's angering China. The Dalai Lama gets effusive praise from President Bush, members of Congress. Coming up, we will speak with one of the Dalai Lama's greatest supporters, the actor Richard Gere. He's walking into THE SITUATION ROOM right now.

Welcome, Richard. Stand by for a moment.

Also, he was Saddam Hussein's jailer, so how can an American commander be accused of aiding the enemy?

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: You know him for his movies, of course, but Richard Gere is also a famous and outspoken advocate for human rights in Tibet and elsewhere around the world. He's here in Washington right now supporting the Dalai Lama, a man he's long admired.

Today, the spiritual leader -- spiritual leader received the Congressional Gold Medal. President Bush handed it to him and said he admires the Dalai Lama and likes him, supports religious freedom as well. That's something President Bush said China would be wise to do itself.

Listen.

(BEGIN VIDEO CLIP)

BUSH: Americans cannot look to the plight of the religiously oppressed and close our eyes or turn away. And that is why I will continue to urge the leaders of China to welcome the Dalai Lama to China. They will find this good man to be a man of peace and reconciliation.

(END VIDEO CLIP)

BLITZER: We want to talk a little bit more about the nation's highest civilian honor now being given to the Dalai Lama. The actor Richard Gere is here in THE SITUATION ROOM.

Thanks very much for coming in.

RICHARD GERE, ACTOR: Thanks, Wolf.

BLITZER: It was quite an amazing ceremony today. I don't know if you have ever seen anything like that before. Have you?

GERE: No. This is the first time that I have been to one of these ceremonies.

But this is -- to see bipartisan support and the president of the United States being so, I thought, emotional, and reaching down deep inside of themselves, and speaking about the Dalai Lama the way we would want them to speak about ourselves as Americans, this is our highest aspiration.

BLITZER: You see the president, the speaker of the House, Nancy Pelosi, and all these members and others coming -- coming together.

(CROSSTALK)

GERE: ... Elie Wiesel. I mean, this...

(CROSSTALK)

BLITZER: Elie Wiesel was there.

(CROSSTALK)

GERE: ... huge.

BLITZER: Why, first of all, are you as passionate as you are in trying to support a free Tibet and the Dalai Lama?

GERE: Well, clearly, these are a people who deserve their freedom.

And, as his holiness says, he's looking for meaningful autonomy, so that their religion and culture can survive. And the onslaught of the Han Chinese and the communist Chinese government and their policies has been destroying them now since 1959.

BLITZER: Were you surprised at how effusive, how open the president was today...

GERE: Yes.

BLITZER: ... in his public remarks, and in the way he actually dealt with the Dalai Lama? Because presidents often meet with the dalai lama, but it's usually behind closed doors, no pictures, no nothing.

GERE: Well, you know, actually, the first president to be photographed openly with his holiness was his father, was the first Bush.

And, look, this president, I have a lot of problems with, but, in terms of Tibet and HIV-AIDS, he's done extraordinary things.

(CROSSTALK)

GERE: But I must say, the -- not only the speakers were of one mind and of one heart about supporting the Dalai Lama and his cause, which is a just one, supporting him as a person also. You felt this extraordinary closeness that they all felt for him and history with him, but also in the audience there.

It was such a huge number. Nancy Pelosi told me later...

(CROSSTALK)

BLITZER: I have interviewed the Dalai Lama in the past, and he is an amazing man.

But go ahead. Tell us what Nancy Pelosi told you.

GERE: Well, she said, she looked out and she had never seen so many people at one of those events, I mean, representatives and senators who were there, wanting to be part of this event. It was deeply emotional.

BLITZER: What about the Chinese government's reaction? Because they're saying all these things that they're not happy about this, and there will be consequences.

What do you think?

GERE: Well, it's kind of childish. I mean, they're using this kind of old-form characterization. He's a splitist, these kind of childish remarks.

BLITZER: Because he's not calling for an independent Tibet.

GERE: No.

(CROSSTALK)

BLITZER: He's saying it should be part of China, but should have autonomy.

GERE: The autonomy is meaningful autonomy in terms of religion and culture.

You have to understand this is a vast area we're talking about. Tibet is the size of Western Europe. And it's a very delicate ecological place. The Han Chinese have now -- the Chinese government, communist government has brought in over six million Chinese settlers, many of them subsidized. And they're...

BLITZER: To try to change the demographics?

GERE: Oh, absolutely. They have done this elsewhere all over what is now China.

(CROSSTALK)

BLITZER: What do you want the U.S. government, the Congress, the executive branch, what do you want the U.S. to do?

(CROSSTALK)

GERE: First, what they're doing now. In harmony, all parts of our government have said, yes, this cause is just. It's not political. It's human. It's in the area of human rights and civil rights, and the will of -- and the need, the desire, the -- the right of all of us to practice religion, to practice our own culture in a way, that the richness, the richness of China, the richness of the world demands that...

(CROSSTALK)

BLITZER: I will ask you this. How do you get the Chinese to change? For example, there's the Beijing Olympic Games coming up this summer.

GERE: Yes.

BLITZER: Where do you stand? Because some are saying maybe it's time to think about a boycott.

GERE: Boycott's difficult to me. I don't believe in isolation. I believe in speaking the truth and speaking the truth loudly in every instance. And I must say, our State Department and our executive branch has been doing that.

I think forcing, strongly, and if you would rather say suggest strongly, the meeting between the Dalai Lama and the leaders, Hu Jintao in China around the Olympics would be great for Hu Jintao. It would be great for China. They have huge problems in that country in dealing with the rest of the world. The human rights abuses are well documented. The abuse of their own people and their minorities is well documented.

To create a positive situation with the Dalai Lama -- and this is all resolvable. These are not huge issues we're talking about. It's freedom of religion, freedom of development of culture.

BLITZER: Richard Gere, thanks for coming into Washington and thanks for coming into THE SITUATION ROOM.

GERE: Thank you.

BLITZER: And thanks for all those excellent films as well.

GERE: Thanks a lot.

BLITZER: Any fallout, by the way, on that kiss in India with the -- remember, you were going to be arrested if you came back to India.

(CROSSTALK)

GERE: No, I don't remember a thing about that.

BLITZER: The famous kiss.

GERE: The famous kiss. She's a beautiful girl, I have to tell you.

BLITZER: She certainly is, Shilpa Shetty.

Nothing? Nothing going on, on that front?

GERE: You want to stay on here for more? I will give you more stuff.

(CROSSTALK)

GERE: Let's go back to Tibet, because I would rather give the time to that.

BLITZER: Has the Indian government gotten over that?

GERE: No, the Indian government has.

But the Chinese government now. Now, it's an interesting thing about the Chinese. The Chinese earn this extraordinary state where they are on the edge of achieving their greatness.

Now, I think it's incumbent upon us, as the superstar on the planet now, the superpower, to say, look, if you want to be the great country that you want to be, this is the way you do it. It's through dialogue. It's through honoring nonviolent demonstrations. This is -- if you want to be in the group with us, if you want to be in the Security Council of the U.N., this is how we behave.

And I think it's important for us to bring that up in every instance.

BLITZER: Richard Gere, thanks for coming in.

GERE: Thanks a lot.

I got around that a little bit, didn't I?

BLITZER: Don't leave yet. Hold on.

(CROSSTALK)

(LAUGHTER)

BLITZER: Hold on.

Mitt Romney touts his conservative credentials. Now he wants you to know about some fresh conservative support. We're going to tell you who has just endorsed him.

Also, Turkish lawmakers do what the U.S. hoped they wouldn't do, something that could make Iraq's violence even worse.

And he's an Army lieutenant colonel who guarded Saddam Hussein in his final days. Did he really help give the deposed dictator Cuban cigars and hair dye? And could he be going to jail for life for allegedly aiding the enemy through other acts?

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: On our Political Ticker this Wednesday, Republican presidential candidate Mitt Romney is bragging about two new endorsements designed to help him bolster his standing among conservatives.

The Romney camp confirming that Florida Congressman Connie Mack is supporting the former Massachusetts governor. So is Bob Jones III, the president of the socially conservatives Bob Jones University in South Carolina.

Rival Republican Rudy Giuliani also claiming a big new endorsement in his effort to win over conservatives wary about his stance on abortion. Texas Governor and abortion opponent Rick Perry announced today he's in Giuliani's corner. Perry says Giuliani's support for abortion rights was his biggest concern in deciding to back the former New York mayor's presidential bid. But Perry says he expects Giuliani would nominate conservatives to the bench.

Remember, for the latest political news at any time, you can always check out our Political Ticker at CNN.com/ticker.

Let's go to Jack Cafferty for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour is, should $150 million of NASA's budget be used instead for jailing illegal aliens?

Bert writes from California: "I don't care where the money comes from. If we want to stay a sovereign nation, we need to stop the tsunami of illegal immigration, jail the criminal employers and criminal element among the illegals, and force Mexico to take care of its own people."

Bill in Michigan writes: "Yes. Maybe if more agencies like NASA have to feel the illegal alien problem in their pockets, we might get the government to start doing something."

Kramer writes: "Instead of using NASA's budget to nail illegal immigrants, let's use our Iraq war budget. Let's use our money earmarked for war on one that we should be fighting at home."

Oscar in California: "As we slowly decline, not only in political clout and economic strength, do we also want to be substandard in space exploration? Part of the benefit that space exploration brings to our nation is directly related to the research. We must advance our technology, which, in turn, will help our economy, maybe even our political influence."

Mike in South Carolina writes: "If it's only $150 million, take it out of the $190 billion war supplemental. Halliburton won't even miss it. Why mess with a little budget like NASA's? Take it out of the budget-busters, like the defense manufacturers guaranteed profit fund that we have been running since Bush and Cheney have been in office."

And Dave writes from Vancouver: "Searching for extraterrestrial aliens or jailing illegal ones? Tough choice. Jailing is the ticket. Looking for more just seems to be counterproductive" -- Wolf.

BLITZER: All right, Jack, thank you.

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